Abstract
Article history: Received January 6 2014 Received in Revised Format June 15 2014 Accepted July 17 2014 Available online July 31 2014 The objective of this paper is to develop an integrated production inventory model for reworkable items with exponential demand rate. This is a three-layer supply chain model with perspectives of supplier, producer and retailer. Supplier delivers raw material to the producer and finished goods to the retailer. We consider perfect and imperfect quality products, product reliability and reworking of imperfect items. After screening, defective items reworked at a cost just after the regular manufacturing schedule. At the beginning, the manufacturing system starts produce perfect items, after some time the manufacturing system can undergo into “out-of-control” situation from “in-control” situation, which is controlled by reverse logistic technique. This paper deliberates the effects of business strategies like optimum order size of raw material, exponential demand rate, production rate is demand dependent, idle times and reverse logistics for an integrated marketing system. Mathematica is used to develop the optimal solution of production rate and raw material order for maximum expected average profit. A numerical example and sensitivity analysis is illustrated to validate the model. © 2014 Growing Science Ltd. All rights reserved
Highlights
Mathematical modeling, analysis and calculation are important areas for research in the study of supply chain system
The objective of this paper is to develop an integrated production inventory model for reworkable items with exponential demand rate
The combination among suppliers, producers and retailers is important for an integrated supply chain system
Summary
Mathematical modeling, analysis and calculation are important areas for research in the study of supply chain system. Cardenas-Barron (2007) extended the model of Khouja and Mehrez (1994) by mathematical method, assuming n-stage multi-customer supply chain inventory coordination. Chiu et al (2007) developed the job of Chiu (2003) and considered the best run-time difficulty of economic production quantity model with scrap, reworking of imperfect objects and stochastic breakdowns. Sana (2011) developed an integrated production inventory model of perfect and imperfect quality products in a three-layer supply chain. Krishnamoorthi and Panayappam (2013) considered a single stage manufacturing system in which imperfect quality items produced and reworked They developed two production models, one with shortages and second without shortages. The average profits of suppliers and retailers are considered
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